Farm bill could have local impact

Sunday

HOUMA -- Sugar-cane processors and Gulf Coast fishermen are likely to benefit from a U.S. farm bill that now heads toward final congressional approval.

The bill could provide as much as a 1-cent increase to loan rates for sugar-cane processors.

In addition, one provision aims to restore 830,000 acres of wetlands along the Mississippi River that could reduce fertilizer runoff from Midwest farms blamed for the so-called dead zone in the Gulf of Mexico, which appears each summer off the Louisiana coast. The area, which at its peak covers an area the size of New Jersey, lacks enough oxygen to support marine life.

Both the U.S. House of Representatives and the Senate have drafted and passed farm bills.

The two bills are currently in conference committee, which includes members from both congressional chambers.

The committee will hash out a single bill from the two proposed bills and send it to the presidentís desk for approval. Congress will take up on the bill when it returns from its Christmas break.

President Bush has threatened to veto the bill, claiming the $286 billion measure costs too much and does not cut farm subsidies enough.

Bush has called for a reduction in farm-related payments to individuals who make over $200,000 a year. The current cap is $2.5 million.

The Senate version would ban payments to "non-farmers" who have incomes more than $750,000 a year. Farmers are defined in the bill as individuals who derive two-thirds of their income from agriculture.

The House version would ban payments to any individual earning $1 million a year or more and bans some farmers from collecting multiple payments from multiple businesses.

The sugar-cane aspect of the bill, contained in both the House and Senate versions, would increase the loan rate sugar producers receive from the U.S. Department of Agriculture.

The House bill would increase the rate from 18 cents to 18.5 cents per pound of sugar. The Senate version offers a one-cent increase, which is staggered over four years.

Each season, sugar-cane processors can take

out short-term, low-interest loans from the USDA to pay for the cost of storing processed sugar through the season, until it is marketed.

The loan rate, as well as factors like shipping costs, also contribute to determining the minimum price per pound for sugar. The minimum price usually hovers around 20 to 21 cents.

If sugar prices fall below the minimum, processors can foreit the loan, and the USDA takes ownership of their sugar as payment. The processor is still responsible for storing the sugar, however.

U.S. sugar producers have not seen an increase in the loan rate since 1985.

"Weíre hopeful that when they do confirm we can have a full 1-cent increase," said Jim Simon, general manager of the Thibodaux-based American Sugarcane League.

These provisions are crucial for protecting U.S. sugar producers, as the North American Free Trade Agreement goes into effect at the start of 2008, sugar advocates say.

A spokesperson for Sen. Mary Landrieu, D-La., explained that the USDA tries to determine at the start of each year how much sugar domestic providers will generate and then allows imported sugar to flow into the country in order to prevent an oversupply.

But sugar production numbers from Mexico have proven unreliable in the past, leading to volatility in the sugar market.

"Hopefully it will help folks who have been strapped the last couple of years," said Rep. Charlie Melancon, D-Napoleonville, a former director of the Sugar Cane League. He added that farmers in south Louisiana have never really fully recovered from the storms Lily, Isidore and Rita.

Related to the Farm Bill and sugarcane production is the signing of the Energy Independence and Security Act of 2007 on Wednesday by President Bush. The act calls for fuel producers to use 36 billion gallons of biofuels like sugar-cane and corn ethanol in 2022.

"Folks in our industry are looking at that as an opportunity," Simon said.

In the event of an oversupply, the USDA will be required to divert excess sugar into corn ethanol production.

"It accelerates the fermentation process," Simon said. "We think itís a new twist in the farm bill and something we think is important."

The push to biofuels, however, trades air quality for water quality. Demand for ethanol has doubled the price of corn from about $2 to $4 per bushel since 2002, enticing farmers to plant more, often and substituting corn for other crops.

Farmers in Iowa, Illinois, Minnesota, North Dakota and South Dakota planted more than 93 million acres of corn in 2007, the most since 1933.

But more corn means more fertilizer use, which will contribute to the ever-growing area of low-oxygen waters in the Gulf of Mexico, often referred to as the "dead zone."

"It is critical that we mitigate the increase of nitrogen runoff from northern farmland that drains into the Mississippi River and kills our marine life in the Gulf of Mexico," Landrieu said.

Landrieu added an amendment to the Senate version of the Farm Bill that expands on the Farmable Wetlands Program. The program enrolls acreage into a conservation program that replenishes repairs and even builds wetlands. These wetlands, called "treatment wetlands," are designed to act as a buffer and filter for fertilizer runoff to improve water quality.

The USDA program, which is operated by its Natural Resources Conservation Service, has been in effect since the mid 1990s. The program is already funded and has a cap of 1 million acres. It has so far only enrolled about 170,000 acres.

Landrieuís provision changes the program by allowing it to enroll parcels of land as large as 40 acres, which is a large increase from the programís original 5-acre cap.

"The language I added to the Senate Farm Bill works to combat the deadly hypoxic conditions in the Gulf to ensure that our oyster farmers, shrimpers and fishermen continue to prosper," Landrieu said.

Wetlands, shallow water areas and buffer areas are open to the program. And while land in Louisiana is eligible, the plan will be to target property in the Upper Mississippi River basin.

By developing wetlands and buffer land in those regions, it may be possible to reduce the amount of nitrogen flowing into the Mississippi. Scientists have blamed the fertilizer runoff as the culprit behind the dead zone, which at its peak covers an area off the Louisiana coast the size of New Jersey.

"You have to tackle it at the source," said Sara Hopper, an attorney with the Environmental Defense, a nonprofit environmental group based in Washington, D.C. She said a study conducted by Iowa State University shows that if 3.4 million acres of land were enrolled into the program and developed, the runoff into the Gulf would be reduced by as much as 30 percent.

"I do think this is a significant step forward," she said.

Hopper worked with Landrieuís office on developing the provision.

The Associated Press contributed to this story.

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